Every product, goods, or service is an example of a huge business that is running behind it. The world is run by businesses and they play a pivotal role in boosting the economy of the country. There are two types of business – entrepreneurship and small business.
Entrepreneurship vs Small Business
The main difference between entrepreneurship and small business is that entrepreneurship is the creation and establishment of a business, venture, service, or product by identifying a business opportunity while small business is the operation and management of a business on a small scale with low capital.
Entrepreneurship includes individuals or groups of individuals called entrepreneurs that are ready to change, invent and innovate the existing system and bring forth products and services that were not present in the existing system. Entrepreneurship includes high-risk takings. The focus in entrepreneurship is not solely on profit-making but acceptance of the business idea by the mass.
On the other hand, small businesses do not work on new ideas rather build a model on existing ideas. The main focus of a small business is on profit-making. They do not work on any innovative or creative ideas and do not take high risks. Hence the returns on small businesses are also lower.
Comparison Table Between Entrepreneurship and Small Business
|Parameters of Comparison||Entrepreneurship||Small Business|
|Types||Home-based owners, online business owners, and serial entrepreneurs||Sole proprietorship, partnership, corporation, and Limited Liability Company (LLC)|
|Objective||To make maximum profits from the market||To introduce unique and creative products and goods in the market|
|Owner||Individuals or groups of individuals||Individuals or groups of individuals|
|Business expansion||Limited||Fast and rapid|
What is Enterpreneurship?
Entrepreneurship refers to the creation of new ventures, values, or businesses. Innovation and change in the existing system with the integration of risk are involved in entrepreneurship. Entrepreneurship involves the processes like designing, launching, collaborating, managing and operating a new business or venture. Entrepreneurship begins as a small business and later pursues as it experiences growth.
Entrepreneurship is the basis of many successful companies. The individual or group that starts entrepreneurship is termed an entrepreneur. The vision aims and the idea of an entrepreneur determine and dictate the growth and success of entrepreneurship. The biggest companies like Walt Disney, Google, Amazon, Apple, Harley-Davidson grew successful due to the creative vision of their entrepreneur.
The risk appetite of entrepreneurship is high. They are constantly looking for new opportunities and are ready to change and grow the business. Entrepreneurship has an idea and wants to bring about creativity and innovation and sell products and services that are unique. Entrepreneurship does not focus extensively on profit-making. The objective of entrepreneurs is diverse and broad.
Entrepreneurship has a clear vision of expansion and growth, works on every new opportunity. Entrepreneurship has the potential for extreme growth and success. The success rate of entrepreneurship is considered high. Entrepreneurship revolves around a specific opportunity and the business is created from it.
What is Small Business?
A small business is an operation of a business on a small and limited scale. Small businesses are usually owned and managed by individuals or groups. Every small business work on a different principle which depends upon the individual owner. Every small business aims to earn profit. Small businesses stick to a specific niche and cater services and products related to that niche.
The two most common and popular types of small businesses are partnership and proprietorship. In partnership, there are two or more individuals that can share the liabilities and profits of the business. The share may or may not be equal depending upon the contract between the parties. Multiple partners help in the venture capital of the business. While in proprietorship, an individual runs operate and owns the business. He/she is liable for every loss and profit.
The owners of small businesses are usually content with the niche and type of business. They do not explore or look forward to new opportunities. The expansion of small businesses remains small or medium throughout. A small business may have employees less than 50. Every decision of a small business is controlled by the owner or individual.
The sales volume of small businesses is relatively low. Since the size is small, the capital outlay is smaller. Small business owners are self-employed. They do not want to change or bring evolution to their products and are usually content and satisfied in the current state.
Main Difference Between Enterpreneurship and Small Business
- Entrepreneurship accepts and explores new opportunities constantly while small business does not explore new opportunities.
- Entrepreneurship does not extensively focus on profit-making rather on innovation, unique and creative products and services while small business extensively focuses on profit-making and not on innovation.
- The business expansion in entrepreneurship is rapid and fast while the business does not expand rapidly in small businesses.
- Entrepreneurship has the willingness and capacity to take high risks while small businesses are not capable of taking high risks.
- The returns from entrepreneurship are bigger while the returns from small businesses are smaller.
Entrepreneurship and small business are words that appear confusing and often are used interchangeably. Most entrepreneurial ventures begin an as small businesses but all small businesses cannot be termed under entrepreneurship. Entrepreneurs are called proactive while small business owners are called reactive.
Entrepreneurship works on passion while small businesses work on profits. Entrepreneurship has a larger market share while small businesses have a smaller market share. Entrepreneurship is built on a unique, innovative, and new idea while small businesses are built on some existing system and do not wish to bring creativity in their venture.
Since the risk-taking capacity of small businesses is low, small businesses quickly shut when the sales crash to avoid further losses. There is a huge difference in the mindsets of both since entrepreneurship wants to explore while small businesses want to retain.